DRILLING & PRODUCTION QUICK TAKES
US drilling activity continues to rise
According to Barclay’s Drilling Permit Monthly July 2013, onshore drilling permits for the US 30 states that Barclays monitors increased 4% in June, following a 2.7% increase in May
and a 7.9% decrease in April. Utah, Texas, and Kansas saw the
largest changes in permit activity, with gains of 121 permits, 83
permits, and 68 permits, respectively.
“The gradual increase in permit activity will lead to a continued rise in drilling activity, with an acceleration likely in [this
year’s second half],” Barclays said.
In June, the US Bureau of Ocean Energy Management issued
37 permits for floating rigs in the US Gulf of Mexico, compared
with 36 permits announced in May and 45 permits in April.
Of the 37 offshore permits issued in June, 20 permits were for
exploration and 17 were for development.
Exploration locations in the gulf, including both shallow
and deep water, stand at 35, up from 33 at yearend 2012 and
up from 28 at the comparable period last year, according to
“The continued strong permitting environment in the US
Gulf of Mexico suggests a continued improvement in the deepwater rig count, especially in light of recent, very successful
discovery announcements in the lower tertiary. We expect this
to persist in the coming months,” Barclays said.
A total of 41 shallow-water permits ( 3 for new wells) in the
US Gulf of Mexico were issued in June, down from 49 in May
( 10 for new wells) and up from 37 in April ( 4 for new wells).
Gas output builds in Pennsylvania-West Virginia
Southern Pennsylvania and adjacent West Virginia counties
have sustained a notable increase in natural gas production
since early 2012, said the US Energy Information Administration.
Operators have increasingly shifted their attention to more
liquids-rich shale gas in the wet gas regions of the two states,
but production from dry gas areas in this part of the Appalachian basin has benefited from the addition of pipelines and
gas processing plants, improving takeaway capacity from the
gas fields, EIA noted.
From July to September 2012, three projects expanded production capacity by nearly 1 bcfd.
Equitrans placed its Sunrise project into full service in
July 2012 with capacity to transport 310 MMcfd from Wetzel
County, WV, to Greene County, Pa., and providing access to
five separate interconnections serving Mid-Atlantic consumers.
Dominion Transmission initiated service in September 2012
from the four new compressor stations and 110 miles of new
pipeline built for its Appalachian Gateway project, providing
capacity of 470 MMcfd of gas from producing areas in both
states to an interconnect with the Texas Eastern Transmission
Equitrans placed in service its newly built 200 MMcfd
Blacksville compressor station in Monongalia County, W.Va.,
in the same month.
Gas production in West Virginia and southern Pennsylvania has risen as these expansions provided increased access to
markets, EIA said. Production in West Virginia averaged 2. 34
bcfd through mid-July 2013, compared with 1. 55 bcfd through
mid-July 2012, a 51% increase. Production in the nearby dry
regions of southern Pennsylvania doubled during the period to
1. 73 bcfd from 0.86 bcfd.
Further growth in West Virginia is expected as Texas Eastern announced plans to build a 390 MMcfd pipeline lateral to
its mainline from Dominion’s 200 MMcfd Natrium processing
plant in West Virginia by yearend 2014. Planned processing
plant expansions through the end of 2013 could also add greatly to the state’s processing capacity, which totaled 850 MMcfd
in 2012, EIA added.
RIL, ONGC eye facilities-sharing off India
Privately owned Reliance Industries Ltd. and state-owned Oil
& Natural Gas Corp. have signed a memorandum of understanding to explore sharing by ONGC of RIL’s production facilities offshore eastern India.
The area includes RIL’s deepwater KG-D6 fields, where first-quarter production totals were 500,000 bbl of crude oil, down
41% from the year-earlier quarter; 60,000 bbl of condensate,
down 58%; and 49. 2 bcf of natural gas, down 53%.
RIL attributes the production declines to geologic complexity, natural declines, and higher-than-expected water encroachment. It reported another KG-D6 discovery, which it calls D55,
earlier this year (OGJ Online, May 24, 2013).
ONGC has blocks in the area. In an announcement about
the MOU with RIL it said deep water “constitutes a major component” of its plans to make “substantial investment over a period of the next 5 years” in exploration and development.
PROCESSING QUICK TAKES
Foster Wheeler gets Vietnam complex work
Nghi Son Refinery & Petrochemical LLC has let a project management and consultancy services contract to a Foster Wheeler subsidiary for its 200,000-b/d refinery and petrochemical
complex in Thanh Hoa Province, Vietnam (OGJ Online, June
The refinery, construction of which is to begin soon, will
process Kuwaiti crude oil. Foster Wheeler’s Global Engineering
and Construction Group will manage and administer the engineering, procurement, and construction contractor consortium